President Hillary Clinton May Not Be Able to Tape Back The Obamacare Humpty Dumpty

United Health's warning that it may pull out may cause the program to fall apart


In my morning column at The Week, I mull the news last week that UnitedHealth, the nation's largest insurance

rtcosmin / Foter / CC BY-NC-SA

company, might pull out of Obamacare next year because of the nearly $500 million in losses that exchange customers are visiting on it this year. The program's apologists are poo-poohing this as no big deal. Bloomberg View editorialized that United's announcement doesn't mean much. "The company covers less than 6 percent of the exchange population; if it does pull out, those people will be able to get other coverage," it said.

But "sorry to disappoint" (to use the editorial's words) you Obamacare fans, but this is a potentially life-threatening development for the program. I note:

Avik Roy, who serves as GOP presidential candidate Marco Rubio's health care advisor, suspects United may just be the first domino to fall. Other commercial insurers, such as Aetna, Anthem, and Cigna, have raised premiums by double digits and still say they can't make the numbers work in their favor. Hence, they have withdrawn from counties where their losses were particularly acute.

For-profit companies that have shareholders breathing down their necks don't have much latitude to absorb losses. But even companies that don't face similar profit-maximizing pressures can't escape the basic dilemma confronting the industry. For example, state filings of the non-profit Blue Cross Blue Shield show that the company barely broke even in the first half of 2015. In Texas last year, BCBS collected $2.1 billion in premiums and paid out $2.5 billion in claims.

If these companies pull out, then the adverse selection death spiral may shatter the Obamacare Humpty Dumpty so bad that even a President Hillary Clinton may not be able to find enough red tape to put it back together again.

Go here to read the piece.

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  1. What United is doing is saying that, after the "risk corridor" subsidy expires next year, they are out. Naturally, their goal is to get the subsidies expanded and extended.

    And, honestly, who here thinks that isn't going to happen.

    United will stay in. The subsidy will get bigger, and will be paid out of taxpayer dollars. You can bank on it. United certainly is.

    1. Yeah. I'd love for Shikha's optimism to be warranted, but we have just seen too many times how once legislation is passed, it's pretty much going to stick around forever. There are now too many vested interests who will fight/lobby/crony tooth and nail to keep it. It may be fiddled with here and there, but overall, it's not going anywhere.

      And I would love to be wrong about this.

      1. It may be fiddled with here and there, but overall, it's not going anywhere.

        Yes. 🙁

      2. You may be wrong about something, but this it not it.

        1. He was wrong about Linda Kozlowski no more than 30 minutes ago.

          Just ask him about a movie. There's like a 75% chance he's wrong.

          1. Yeah. Ask me about Jaws.

          2. You've been so cranky lately. Are you feeling OK?

          3. 75%? That is pretty good for an Italian. Pretty much anything under a 90% error rate is considered skilled labor for Italians.

            1. I'm a-highly a-trained!

              1. You have micro-aggressed italian plumbers. Pay any plumbers that have ever, do now, or might ever work within 20 miles of your residence $87/day until they tell you to stop.


                On topic, I'm honestly pessimistic and I said it on the last article here about UHC. Rs and Ds will probably band together and pass a law "Saving" the ACA, no matter how this plays out.

    2. Doc Fix II: The Quickening (of the FedGov Bankruptcy)

    3. I would agree with you except that there isn't a big enough subsidy to make going back in profitable. And there are so many other problems with this monstrosity even if you could increase the subsidies enough to get them back, it still wouldn't save it.

      I think you are wrong that United is betting on the subsidies getting expanded. Thinking they are assumes that subsidies could ever make going back in profitable in the long term. I don't see how it could. Maybe United could get a year or two of subsidies high enough to make it work, though I doubt it, but costs would quickly rise above that and leave them in the same position in a year or two. I don't think they ever plan to go back in. Why would they choose to go into an area that long term shows nothing but the potential for loss?

      1. Captive customer pool.

        1. When those customers are guaranteed to cost you more than they can pay, them being captive doesn't make the pool any more attractive.

          1. Make it up in volume!

      2. Sure there is. And the fedgov is going to prove it even if they have to spend you and your grandchildren's grandchildren into slavery.

        1. Not as long as the House is run by those evil tea baggers. The free shit brigade is not what you guys think it is. Go ask the Democratic candidate for governor in Kentucky about the free shit brigade. His entire campaign was nothing but a promise to keep Obamacare and keep the free shit going and the people who stood to get that free shit were less likely to vote for him than any other group.

          1. John, who is speaker of the house? Think about that for a little while and get back to me.

            1. Who was the Speaker? How did that work out? Who gives a shit what Ryan wants. The other Republicans in the house certainly don't. They want to keep their jobs.

              1. So, what are republican voters gonna do if congress don't do what the voters want? Vote for democrats? This is why neither party cares what the voters want.

                1. Primary the bastards like the did to cantor or just stay home like they did in 06 and 08. Don't think for a moment what happened to Cantor didn't get those rat bastards attention.

                  1. As I recall, Rubio was supposed to be another Tea Party hero. Somehow all of these new heroes of liberty turn into the same old establishment fucks as the rest of them, eventually.

                2. Keep revolving them in and out until you find a Ted Cruz. He has done exctly what he told Texans he would.

                  1. I do count Cruz among the good congress critters we have. That brings the total to around 4. We have lots of revolving to do.

      3. Hang on long enough for your competitors to dissolve, then lobby for changes.

        1. That is what you guys are not getting, it doesn't matter if there is competition or subsidies. It still will never be profitable. And if it ever could be, you wouldn't be able to keep companies from re-entering the market.

      4. Gotta agree with John.

        There's no way to profitably insure a group of people who are already expensively ill. They've already entered the phase where they know what healthcare they need and it has to be treated like a service... which is paid out of pocket or out of debt.

        The people on the exchanges are sicker than average and poorer than average. If United raises rates, they lose the less sick people and lose money. If they lower rates they lose more money on the sick people they've already got. Either way, they lose money. There's no way they are going back into this market once they leave, unless they are guaranteed profits, not just a backstop to losses.

        GOP Congress won't do that. They will let the exchanges wither, as they should.

        1. GOP Congress won't do that.

          Actually, I bet they do exactly that.

          1. Even if they do RC, how does it change the long term economic calculation? These patients are money losers. Congress won't give a high enough subsidy to change that or even if ti does it won't change it for long.

    4. Not sure about this. To increase the subsidies the House would need to allocate the funds. How on Earth can they go to their constituents and rationalize an increased and possibly permanent subsidy to save O'care after running on ending it altogether? This is an issues to make the Tea Party types salivate. They can just refuse to fund it; they don't need to get anything through the Senate - just say "no".

      1. the House would need to allocate the funds

        How quaint.

        How on Earth can they go to their constituents and rationalize

        How even more quaint.

        I bet you also claim to have read and understand that constitution thing that was written like 100 years ago on stone tablets by white slave owners who didn't even speak a language that can be interpreted today!

        Eddie Munster will get the back door deal done in the middle of the night with his right hand man, Obama. He's not going to let his legacy be outshined by that orange dude who quit on us.

        1. Congress has already dealt a blow to the risk corridors by refusing to appropriate money. HHS is only paying out about 15% of amounts due this year because Congress blocked them from raiding other sources of funds (other than the risk corridor payments by the profitable insurers). That was a major factor in the collapse of a number of the co-ops.

          1. Congress has already dealt a blow to the risk corridors by refusing to appropriate money.

            And when DHS starts writing checks, do you think they are going to bounce, or clear?

    5. Can they tweak it without congress amending it? If not, it's DOA come next year.

      1. Ask the Supreme Court. They've proven to be pretty amenable to deciding what the law really meant.

    6. I'm so glad RC's comment was first because it should have been the central subject of the post.

    7. Insurers have left markets, before, though.

      Keep in mind they can still do group plans. They don't need the business.

      I also don't think the pressure on Congress will work, because this is only the exchanges, and not business group plans. Its dispersed costs.

    8. You're a humbug, Mr. Dean. There really is a Santa Claus.

    9. They gutted the risk corridors this year. This is with a democrat president.

  2. Well,just take the proffit out of 'health care ' .Can't His Grace just use his pen?

  3. "Hence, they have withdrawn from counties where their losses were particularly acute."

    That's actually a pretty cool work around. It's probably still too large of a population to make this new model viable, but it's interesting to see what they come up with to keep from going to deep into the red.

    1. Yeah, Mr. Rearden always found a way to stay profitable. Why not the United CEO?

      1. But Rand villians are strawmen!

  4. For example, state filings of the non-profit Blue Cross Blue Shield show that the company barely broke even in the first half of 2015. In Texas last year, BCBS collected $2.1 billion in premiums and paid out $2.5 billion in claims.

    That only gets worse as the year goes on, because a surprisingly high number of people who bought HIE policies stop paying their premiums partway through the year. The ones who drop out are way disproportionately healthy.

    I can't scratch up the info, but I think at least half a million, maybe a million of the HIE policies in January are defunct by August due to nonpayment.

    1. There is nothing that says BDBS has to be a health insurance company. They have other businesses and can go into things they are not doing now. The fall out of this is companies are increasingly just going to get out of the insurance business. Understand two things; people are not going to stand iddly by and do nothing as they no longer can afford or get health insurance and if they lose it, they are not going to demand single payer. They are going to demand their insurance back.

      This thing is going to fall apart and end up being ignored by executive fiat or repealed. That is a when not an if. The only question is how it is repealed and what replaces it not if it will be.

      1. Blue Cross Blue Shield: ask us about auto loans!

        Soon you'll have a Blue Cross Blue Shield credit card. Every purchase will earn you 1% cash toward your health insurance premium.

    2. Keep in mind if you stop paying, you still have 90 days to restart payments and still be covered.

      Stop in August...covered until November, then you can stage a qualified event or just wait one month and be in open enrollment again.

      1. Even with this level of planning, the person who stops paying but then gets really sick will have an adviser tell them how to get back their insurance. The hospital and doctor have an incentive to do that.

        If the person is not sick, they just don't start back up at all.

        So, you essentially will have gaming of the system by default.

  5. Finally, an excuse to link to Digital Underground's The Humpty Dance.

    1. I'm just going to leave this article up so that whoever walks in my office sees the fine honey bent over the desk before realizing that it's a political website.

      In order to stay on thread, I once performed the Humpty Dance at a talent show and was robbed of a well deserved win by, wait for it, a fucking juggler.

      1. But have you ever had sex in a Burger King bathroom?

        1. Or near a dumpster behind Perkins?

          1. Some of us do not have smooth dance moves so we must resort to dumpster shenanigans.

        2. While wearing the Burger King mask?

        3. Out of curiosity, can you actually juggle? (In the traditional sense, not whatever 'juggling' might be defined as on urban dictionary.)

      2. The thing about Humpty Hump that makes me sad is that Shock G could probably never get away with it these days. He'd be exposed on twitter before a word of the bullshit back story had even left his mouth.

  6. The only thing I'll miss about Obamacare (THE MOST FREEMARKETEST PROGRAM EVAR!) is the picture of dat ass. Well, I guess there are technically two asses in that picture.

  7. Solutions will be politically unpopular:

    Make the Mandate stronger with even less exemptions and higher penalties? Yeah, the mandate is already the least favorite part of the law.

    Moar taxes?! Good luck with that one. Maybe ol' Justice Roberts can step in and start writing some (more) laws to save this monstrosity once again.

    Health Insurance bailouts, aka expanded "Risk Corridors"? That will damage the "against big business" - stop laughing - bonafides of the Democrats.

    Increased premiums and higher deductibles will only increase the speed of the death spiral.

    Did I miss anything?

    1. I forgot the best of them all - price controls!

    2. Getting rid of the coverage mandates and let insurance companies go back to selling coverage based on individual risk and only coverage that is profitable. The root cause of this is that the companies are mandated to cover so many things in every policy and since insurance rates are regulated in most states, they can't raise the cost to cover the increased coverage and consumers wouldn't put up with it if they did.

      1. Yeah, should be able to buy across state lines without the state mandates.

        1. And you baggers would vote to eliminate interstate highways next.

          1. No one needs to go to more than one state

    3. How about "Feds to propose assign Medicare expansion" or "Feds to start caring directly for uninsured by paying their bills to hospitals".

      Who gives a fuck if they're legal or not. Obama will unilaterally implement them long enough to get out of Washington before the lawsuits start going against him. In 12 months, he won't give a fuck.

      1. All it will take is one county that has no insurers willing to participate.

        Then Obama will be able to say "What can we do? We have to offer Medicare for these people"

        Nose is in the tent.

  8. Shikha is Heroic Mulatto???

    1. I don't see dat ass moving

  9. I see a very large tax payer funded bailout in the near future of UnitedHealth.

    1. I was just about to type something similar. It is "too big to fail." Obamacare, UnitedHealth, whomever else.

      1. And HHS is already going on about how it's the obligation of the fedgov to bail them out. You know, because women and children hit hardest, dying in the streets, blahblahblah...

        1. Don't forget all the snowflakes in college. Wait until they try calling student loan bills a microaggression. Somebody needs to pay for that. Can't wait to see college prez give all the money back to right past wrongs, make good on past historical oppressions, etc. etc.

          1. They're going to get free college just like they want. Because it won't be worth paying anything for and no one will want it. Supply and demand once again doing it's magic. But that will be lost on the idiots.

            1. The tax money demand already exceeds supply, so who loses then? The old Thatcherism about other peoples' money is 2nd law of political thermodynamics, eventually something has to give!

    2. I see a very large tax payer funded bailout in the near future of UnitedHealth.

      It'll be less targeted. It'll be an industry-wide bailout- with healthcare insurers eventually becoming GSEs.

  10. Two things are going on here. First, insurance companies can no longer sell policies set by individual preference. Every policy must contain a laundry list of coverage. The more you cover the more it costs of course. The second thing is the individual mandate combined with the subsidies has gotten a bunch of poor people to buy insurance. Poor people tend to be a bad insurance risk. They have more health problems, they are more likely to over use services, and they are less likely to pay their premiums.

    So we have insurance companies forced to cover every kind of bullshit imaginable in every policy and being forced to sell to a bunch of people who are generally bad risks. It is no surprise they are losing money. It is also no surprise the middle class, are seeing their quality of their health care evaporate as they pay increased premiums and watch the poor overwhelm their health care networks.

    What will be the result of all this? Who knows. But if it results in anything except the middle class revolting and getting the political class to kick the poor out and give the middle class back what they want, it will be the first time in history.

  11. President Hillary Clinton

    "God forbid!

    /Nero Wolfe

  12. The program's apologists are poo-poohing this as no big deal.

    How is half a billion in losses not a big deal for the nation's largest Obamacare insurer?

    1. It isn't a big deal if you are an economic illiterate moron who thinks corporations print their own money. Don't forget how stupid these people are. They actually don't think this is a big deal and think United is just an evil racist corporation that can't handle a black man being President is the reason United is leaving the markets.

      1. Paul Krugman says that the ACA is very much alive and healthy. That's all that matters, you rat fucking bagger.

  13. I approve of referring to Hillary as "President Hillary Clinton".

    1. Why not Princess Hillary Clinton?

    2. So help me God, if she wins, I will learn how to paint and the go around the city painting murals that would put the Shirtless Putin stuff to shame.

      1. I will pay you hard cash money . . .

        to ensure you never paint a Shirtless Hillary mural.

  14. I don't claim to know what the final outcome of this ridiculous mess is going to be, but I find myself beginning to wonder if the conspiracy theorists who saw this as a setup for government-run healthcare (what progs euphemistically call "single-payer", as if we don't all know who that payer is) might not be crazy after all.

    1. I don't think we are getting single payer. And I don't think it was a conspiracy. These people are just this fucking stupid. They actually thought this was going to work. They are nothing if not earnest in that belief.

      1. I hear ya. But their stupidity is so mind-boggling that it's difficult for me to fathom. And if they completely wreck the health insurance system their "fix" will surely suck, whatever they call it.

      2. Maybe Barry did. Put too much faith in his Top Men like Gruber. That guy, however, strikes me as a scheming weasel, for whatever reason...

        1. He is that but he is also a fucking moron. I guarantee you he thought this was going to work.

        2. Put too much faith in his Top Men like Gruber. That guy, however, strikes me as a scheming weasel, for whatever reason...

          I agree with the Gruber weasel-impression; however I think his conscious scheming is pretty provincial to his own interests - i.e. publicity (not anymore on that one, obviously) and money. Outside of that, I believe his 'modeling' programs are purpose-built to spit out answers he - and his benefactors - want to hear; but derived earnestly as only such a compartmentalized moron could fashion.

          1. Pretty much this. Gruber is the most grossly obsequious little bastard I have ever seen. Every fiber of his body screams "I exist to tell my masters what they want to hear". God what a loathsome waste of space that guy is.

      3. These people are just this fucking stupid.

        Agreed. In order for this to be an elaborate set-up for single payer these people would have to be some kind of evil geniuses, and they're clearly too stupid to tie their own shoes.

        1. ...but I also highly suspect that single payer will end up being their "solution". Evil or stupid doesn't matter when the end result is the same.

  15. The stock photo in article is misleading; no way is America's cumulative ass averaged possibly that hot.

    1. You've just microggressed against the avg female ass in Murika, microagressing privileged shitlord!

  16. I hate to rain on everyone's parade, but United Uealthcare exiting Obamacare will have little impact. Per Bloomberg:

    "UnitedHealth Group, the country's largest health insurer, says it might stop selling plans on state insurance exchanges, citing higher-than-expected costs.

    This news would be mostly unremarkable except for the fact that those state exchanges are part of Obamacare, and it doesn't take much to get people hyperventilating about the imminent death of Obamacare and speculating about its ramifications for the 2016 presidential campaign. Sorry to disappoint, but UnitedHealth's decision -- which is tentative -- doesn't mean much. The company covers less than 6 percent of the exchange population; if it does pull out, those people will be able to get other coverage.

    The only way this would matter to the future of the exchanges would be if other insurers were to follow UnitedHealth's lead. While that's possible, it's unlikely, because the three biggest players -- Aetna, Anthem and Humana -- depend on the exchanges for more of their business, according to data from Bloomberg Intelligence, and have so far shown no signs that they want out.

    UnitedHealth, by contrast, has always been lukewarm about the exchanges. The company stayed out in 2014, the first year they were in operation, and this year it offered plans in fewer than half the states."

    Read the whole thingy


    1. Aetna, Anthem and Humana -- depend on the exchanges for more of their business, according to data from Bloomberg Intelligence, and have so far shown no signs that they want out.

      The fact that they are more dependent on it means it is harder for them to leave and they are consequently more willing to absorb losses before they do. The question is are they losing money? If they are, then it is just a matter of time before they follow United. If they are not, then why was United losing money and they were making it? Possible but I doubt it.

    2. ... Yes... that's what Dalmia is responding to.

    3. I guess you didn't read the part where Shikha quoted the very same article you linked to? And them offered a counter point?

    4. I don't really think it matters if they depend on the exchanges for their business or not. If a business has more money going out then coming in, they eventually go out of business.

    5. Canary in a coal mine.

      If United is losing their ass, what makes you think their competitors aren't, also?

  17. That photo is racist and sexist and I'm offended, you privileged shitlords!

  18. So, that whole death spiral thing WASN'T just a crazy right wing talking point like death panels...Amazing that our media dropped the ball on that one.



    Have we reported on this here at reason? I mean, I know WE are all aware of it, but have we seen this specific article already?

    Also, who is the chick in the photoshopped Obama pick. She is fucking smokin'!!

  20. I don't entirely get the ass picture, but I'm not complaining.

    1. It's a metaphor. The ass is America, and Obama's about to tap dat ass.

  21. even a President Hillary Clinton may not be able to find enough red tape to put it back together again.

    Two words: "MARKIT FAILYURE!!!11!!!1!!!!!!!"

    Two more words: "SINGLE PAYER!!11!!1111!!!!1!!!!"

    1. By the general election, I fully expect Hillary to have adopted the Bernie plan for healthcare. Hillarycare 2.0.

  22. Assurant is out as of end of this year. They arent even waiting for subsidies to expire.

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